Question 1

Which of the following items would be a way to manipulate the cash flow from operating activities amount on the statement of cash flows?

Accepted Answer

A) Adding depreciation back to net income to determine cash flow from operating activities. 
B) Including interest expense and tax expense in the calculation of cash flow from operating activities. 
C) Recording an item that should be recorded as an operating activity as an investing activity. 
D) The cash flow statement cannot be manipulated. 
A) Adding depreciation back to net income to determine cash flow from operating activities. 
B) Including interest expense and tax expense in the calculation of cash flow from operating activities. 
C) Recording an item that should be recorded as an operating activity as an investing activity. 
D) The cash flow statement cannot be manipulated.

Question 2

What is implied if the inventory account has increased?

Accepted Answer

A) Cash flow from financing activities has decreased relative to net income. 
B) Cash flow from operating activities has increased relative to net income. 
C) Cash flow from operating activities has decreased relative to net income. 
D) Cash flow from financing activities has increased relative to net income. 
A) Cash flow from financing activities has decreased relative to net income. 
B) Cash flow from operating activities has increased relative to net income. 
C) Cash flow from operating activities has decreased relative to net income. 
D) Cash flow from financing activities has increased relative to net income.

Question 3

How is the statement of cash flows connected to the balance sheet?

Accepted Answer

A) The statement of cash flows shows changes in the asset and liability accounts to explain cash from operating activities. 
B) The changes in all revenue and expense accounts are calculated and then listed as cash inflows or outflows. 
C) The changes in all of the balance sheet accounts are calculated and then listed as inflows or outflows, except for cash. 
D) Changes in asset accounts are recorded as operating activities, changes in liability accounts are recorded as financing activities and changes in equity accounts are recorded as investing activities. 
A) The statement of cash flows shows changes in the asset and liability accounts to explain cash from operating activities. 
B) The changes in all revenue and expense accounts are calculated and then listed as cash inflows or outflows. 
C) The changes in all of the balance sheet accounts are calculated and then listed as inflows or outflows, except for cash. 
D) Changes in asset accounts are recorded as operating activities, changes in liability accounts are recorded as financing activities and changes in equity accounts are recorded as investing activities.

Question 4

What is cash flow from operating activities for Armstrong Company?

Accepted Answer

A) $505 
B) $495 
C) $335 
D) $55 
A) $505 
B) $495 
C) $335 
D) $55

Question 5

Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r } 
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is cash flow from operating activities for Felix Company?

Accepted Answer

A) $240 
B) $70 
C) $320 
D) $250 
A) $240 
B) $70 
C) $320 
D) $250

Question 6

Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r } 
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is the change in cash for Felix Company?

Accepted Answer

A) $310 
B) $205 
C) $330 
D) $230 
A) $310 
B) $205 
C) $330 
D) $230

Question 7

What is cash from financing activities for Armstrong Company?

Accepted Answer

A) $70 
B) $60 
C) $90 
D) ($110) 
A) $70 
B) $60 
C) $90 
D) ($110)

Question 8

Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r } 
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is cash from financing activities for Felix Company?

Accepted Answer

A) $50 
B) $65 
C) ($50) 
D) $60 
A) $50 
B) $65 
C) ($50) 
D) $60

Question 9

Use the indirect method to answer questions The following information is available for Felix Company:
$$\begin{array} { l r l r } 
\text { Net income } & \$ 300 & \text { Decrease in plant and equip. } & \$ 40 \
\text { Depreciation expense } & 20 & \text { Increase in deferred tax asset } & 5 \
\text { Gain on sale of assets } & 35 & \text { Decrease in long-term debt } & 50 \
\text { Increase in inventories } & 25 & \text { Decrease in accounts payable } & 15
\end{array}$$
-What is cash from investing activities for Felix Company?

Accepted Answer

A) $5 
B) $40 
C) $75 
D) $10 
A) $5 
B) $40 
C) $75 
D) $10

Question 10

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

Accepted Answer

operating,

Question 11

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 12

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

Accepted Answer

A) True 
 B)False

Question 13

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of A decrease in accounts receivable should be------to...

Question 14

What is cash from investing activities for Armstrong Company?

Accepted Answer

A) ($160) 
B) $160 
C) $170 
D) ($170) 
A) ($160) 
B) $160 
C) $170 
D) ($170)

Question 15

What is the preferred method to generate cash in a firm?

Accepted Answer

A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Investing and financing activities. 
A) Operating activities. 
B) Investing activities. 
C) Financing activities. 
D) Investing and financing activities.

Question 16

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

Accepted Answer

The answer of An increase in accounts payable should be------to...

Question 17

Cash flow from operations represents the "cash" income from the company's business operations.

Accepted Answer

A) True 
 B)False

Question 18

What is the change in cash for Armstrong Company?

Accepted Answer

A) $315 
B) $565 
C) $425 
D) $215 
A) $315 
B) $565 
C) $425 
D) $215

Question 19

The following item would be classified as a financing activity on the statement of cash flows:

Accepted Answer

A) Payments for inventory. 
B) Payment of dividends. 
C) Acquisition of land. 
D) Sales of goods. 
A) Payments for inventory. 
B) Payment of dividends. 
C) Acquisition of land. 
D) Sales of goods.

Question 20

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

Accepted Answer

The answer of Per FASB rules, firms may use the------method...

Which of the following items would be a way to manipulate the cash flow from operating activities amount on the statement of cash flows?

What is implied if the inventory account has increased?

How is the statement of cash flows connected to the balance sheet?

What is cash flow from operating activities for Armstrong Company?

What is cash from financing activities for Armstrong Company?

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

What is cash from investing activities for Armstrong Company?

What is the preferred method to generate cash in a firm?

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

Cash flow from operations represents the "cash" income from the company's business operations.

What is the change in cash for Armstrong Company?

The following item would be classified as a financing activity on the statement of cash flows:

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

Financial Statements: an Overview

The Balance Sheet

Income Statement and Statement of Stockholders Equity

The Analysis of Financial Statements

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Exam 4: Statement of Cash Flows

Which of the following items would be a way to manipulate the cash flow from operating activities amount on the statement of cash flows?

What is implied if the inventory account has increased?

How is the statement of cash flows connected to the balance sheet?

What is cash flow from operating activities for Armstrong Company?

What is cash from financing activities for Armstrong Company?

Cash flows are segregated on a statement of cash flows by------activities,------activities, and------activities.

Cash from sales of property, plant and equipment is considered an operating activity on the cash flow statement.

Analyzing the statement of cash flows helps determine the future external financing needs of a business firm.

A decrease in accounts receivable should be------to convert net income to cash flow from operating activities.

What is cash from investing activities for Armstrong Company?

What is the preferred method to generate cash in a firm?

An increase in accounts payable should be------to convert net income to cash flow from operating activities.

Cash flow from operations represents the "cash" income from the company's business operations.

What is the change in cash for Armstrong Company?

The following item would be classified as a financing activity on the statement of cash flows:

Per FASB rules, firms may use the------method or the------method to calculate and present cash flow from operating activities.

Financial Statements: an Overview

The Balance Sheet

Income Statement and Statement of Stockholders Equity

The Analysis of Financial Statements

Filters